No subsidy for new gas storage, government announced

Direct support for gas storage would cost bill payers £750 million over 10 years for limited benefit, according to research commissioned by ministers from consultancy Redpoint.

The Department of Energy and Climate Change (Decc) robustly countered recent media reports that a cold winter could see UK reserves run out. It said the UK had capacity to deliver twice the amount of gas needed in a normal winter.

Energy minister Michael Fallon said: "Security of supply can be delivered more cheaply by the market and action is already being taken to ensure that it provides sufficient energy in the short and medium term.

"The government is committed to doing all it can to help consumers reduce energy bills, and there is no benefit in further expensive subsidies when the market is working. Gas supplies worldwide are increasing, and it is increasingly easy to import additional supplies to the UK if required.

"It is up to industry to get on and invest in building gas storage, and they are doing so. Two gas storage facilities have recently been built and two more are under construction."

Once those facilities are completed, Decc said storage capacity will have doubled since 2000.

A further 12 gas storage schemes have got planning permission and are waiting for the right market conditions to go ahead.

 

Source: Utility Week